Tax Deduction Calculator

Common Deductions (2024)

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Frequently Asked Questions

What is a tax deduction?

A tax deduction reduces your taxable income, lowering the amount of income subject to tax. Unlike tax credits which reduce tax dollar-for-dollar, deductions reduce tax by your marginal rate. For example, a $1,000 deduction for someone in the 22% bracket saves $220 in taxes.

What is the difference between standard and itemized deductions?

The standard deduction is a fixed amount based on filing status ($14,600 single, $29,200 married filing jointly in 2024). Itemized deductions are individual expenses you can claim if they exceed the standard deduction. You choose whichever gives the greater tax benefit.

What is the current standard deduction?

For 2024, the standard deduction is $14,600 for single filers, $29,200 for married filing jointly, $21,900 for head of household, and $14,600 for qualifying widow(er). These amounts are adjusted annually for inflation.

What deductions can I itemize?

Common itemized deductions include: mortgage interest (up to $750,000 principal), state and local taxes (SALT, capped at $10,000), charitable contributions, medical expenses exceeding 7.5% of AGI, gambling losses, and casualty losses in federally declared disaster areas.

What is the SALT deduction cap?

The Tax Cuts and Jobs Act capped the deduction for state and local taxes (SALT) at $10,000 per year ($5,000 if married filing separately). This includes combined state income tax and property taxes. The cap is set to expire after 2025 unless extended by Congress.

What is the standard mileage rate for business?

The 2024 standard mileage rate for business use of a vehicle is 67 cents per mile. You can deduct either actual expenses (gas, maintenance, insurance, depreciation) or the standard mileage rate, whichever is more beneficial for your situation.

What are above-the-line deductions?

Above-the-line deductions (also called adjustments to income) are subtracted from gross income to arrive at adjusted gross income (AGI). They include HSA contributions, IRA contributions, student loan interest, educator expenses, self-employment tax, and alimony payments.

How does the mortgage interest deduction work?

You can deduct interest paid on up to $750,000 of mortgage debt ($375,000 if married filing separately) for homes purchased after December 15, 2017. For older mortgages, the limit is $1,000,000. The deduction is available whether you itemize or not for qualified mortgage insurance premiums.

What is the charitable contribution deduction limit?

Charitable deductions are generally limited to 60% of adjusted gross income for cash contributions to public charities. Limits for other types of donations include 30% for appreciated assets and 20-30% for contributions to private foundations.

Can I deduct medical expenses?

You can deduct medical expenses that exceed 7.5% of your adjusted gross income. Qualified expenses include doctor visits, prescriptions, hospital care, dental treatment, vision care, some health insurance premiums, and transportation for medical care. Cosmetic procedures are generally not deductible.

What is the student loan interest deduction?

You can deduct up to $2,500 of interest paid on qualified student loans. This is an above-the-line deduction (no need to itemize). The deduction phases out for higher-income taxpayers: single filers with MAGI over $85,000, married over $175,000.

What is the educator expense deduction?

Teachers and educators can deduct up to $300 of unreimbursed classroom supply expenses. This is an above-the-line deduction. If both spouses are educators, the limit is $600. Qualifying expenses include books, supplies, equipment, and software used in the classroom.

What is the HSA deduction?

Health Savings Account (HSA) contributions are deductible up to $4,150 for individual coverage and $8,300 for family coverage in 2024. Those 55+ can contribute an additional $1,000 catch-up. Contributions reduce both taxable income and FICA taxes if made through payroll.

What is the IRA deduction?

Traditional IRA contributions are deductible up to $7,000 ($8,000 if 50+) in 2024. The deduction phases out based on income and whether you or your spouse are covered by a workplace retirement plan. The deduction is above-the-line and available regardless of itemization.

What is the self-employment health insurance deduction?

Self-employed individuals can deduct 100% of health insurance premiums for themselves, their spouse, and dependents. This is an above-the-line deduction that also reduces self-employment tax. It cannot exceed net self-employment income.

What is the home office deduction?

The home office deduction allows self-employed individuals to deduct expenses for a dedicated home office space. The simplified method allows $5 per square foot up to 300 sq ft ($1,500 max). The regular method requires calculating actual expenses and depreciation.

What is the standard deduction for seniors?

Taxpayers aged 65 or older receive an additional standard deduction: $1,950 for single filers and $1,550 per qualifying spouse for married filing jointly. Blind taxpayers also qualify for the additional amount. These amounts are adjusted annually.

What deductions are available for rental properties?

Rental property owners can deduct mortgage interest, property taxes, insurance, repairs, maintenance, HOA fees, property management fees, utilities, advertising, travel expenses, and depreciation (typically 27.5 years for residential property).

What is the business meal deduction?

Business meals are 50% deductible under current law. Meals provided for the convenience of the employer (e.g., office cafeteria) are 50% deductible in 2024. Meal expenses while traveling for business are also 50% deductible. Entertainment expenses are not deductible.

What is the depreciation deduction?

Depreciation allows you to deduct the cost of business assets over their useful life. Section 179 allows immediate expensing up to $1,220,000 (2024) on qualified equipment. Bonus depreciation allows 60% immediate deduction on new assets in 2024.

Can I deduct home improvement costs?

Home improvements are generally not deductible as itemized deductions. However, energy-efficient improvements may qualify for tax credits (not deductions). Home improvements that are medically necessary may qualify as medical expense deductions.

What is the deduction for business use of vehicle?

Business use of a vehicle can be deducted using the standard mileage rate (67 cents/mile in 2024) or actual expense method (gas, maintenance, insurance, registration, depreciation). The standard mileage method is simpler but may yield less deduction for expensive vehicles.

What is the moving expense deduction?

The moving expense deduction was eliminated for most taxpayers by the Tax Cuts and Jobs Act (2018-2025). It is still available for active-duty military members moving due to a permanent change of station. Other taxpayers cannot deduct moving expenses.

How do deductions phase out at higher incomes?

Several deductions phase out at higher income levels, including IRA deductions, student loan interest, and the rental real estate loss allowance. Higher-income taxpayers may also face the Pease limitation on certain itemized deductions (though suspended through 2025).

What is the itemized deduction phaseout (Pease)?

The Pease limitation reduces itemized deductions by 3% of AGI over a threshold ($266,700 single, $320,000 married in 2024). This limitation is currently suspended through 2025 due to the Tax Cuts and Jobs Act but will return in 2026.

How do I decide whether to itemize or take standard deduction?

Compare total itemized deductions to your standard deduction. If itemized deductions exceed the standard deduction, itemize. Common triggers for itemizing include: large mortgage interest, high state taxes, significant charitable contributions, or large medical expenses.

What documentation do I need for deductions?

Maintain receipts, bank statements, tax forms (1098 for mortgage interest, 1098-T for tuition, W-2 for withholding), mileage logs, charitable acknowledgment letters, and medical expense records. The IRS typically accepts scanned copies if legible.

What is the standard deduction for dependents?

Dependents who are claimed on another persons return have a limited standard deduction. In 2024, its the greater of $1,300 or earned income plus $450, up to the regular standard deduction amount. This ensures dependents pay tax on unearned income over $1,300.

What deductions are available for gig economy workers?

Gig economy workers can deduct business expenses including: vehicle expenses, equipment, supplies, software, website costs, marketing, home office, internet, phone, and travel expenses. Keep detailed records of all business-related expenses throughout the year.

What is the tax benefit of bunching deductions?

Bunching involves concentrating itemized deductions into alternating years to exceed the standard deduction threshold. For example, making two years of charitable contributions in one year, then taking the standard deduction the next year. This strategy works well for charitable giving.